PNB hit by new share jitters

THE stock of Punjab National Bank has been witnessing continuous selling after the second public issue of the bank closed earlier this month.

The stock price of the bank is down from high of Rs 512 touched earlier this month. On Monday, the stock was down 0.36 per cent at Rs 405.35 on the BSE with volumes of 9.74 lakh shares; on the NSE, it closed at Rs 405.25, down 0.41 per cent, with volumes of 25.23 lakh shares.

Dealers said the main reason for the fall in the stock price is that the floating stock of PNB shares would increase after listing and investors aware of this are selling above the issue price of Rs 390.

Moreover, the view is that if the market price remains above the issue price, several of the investors who had borrowed funds for subscribing to the issue would also sell. So investors who had bought the shares from the open market before or at the time of public issue are now selling.

The talk is that once the new shares are listed more selling may be witnessed if the issue price falls below the offer price.

Basket selling raids marketTHE sharp rise in the stock indices on Monday could not be sustained with part of the gains made being lost in the last 45 minutes of trading.

The BSE Sensex gained more than 110 points during the intra-day but closed with just 68 points rise.

Dealers said the fall from the days high was mainly due to basket selling of Sensex and Nifty by select market players in the last few minutes of trading. Moreover, talk of stock brokers being raided by the Income-Tax department further aggravated the situation.

Fund buying seen in Satyam Computer

ON a day when there was limited institutional activity, Satyam Computer attracted some buying from them.

Dealers said several broking houses had buy orders for Satyam Computer from their institutional clients. But majority of the buying came from local institutions.

Market talk is that buying was ahead of the company's financial results to be announced next month. Market expectations are that the last quarter of the company would be better than previous quarters.

On Monday, the stock of Satyam Computer gained 2.82 per cent at Rs 398.60 on the BSE with volumes of 13.84 lakh shares; on the NSE, it closed at Rs 399.35, up 3.06 per cent, with volumes of 44.31 lakh shares.

Virendra Verma

(This article was published in the Business Line print edition dated March 29, 2005)

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